Our Grand Rapids Community Foundation

Giving Now

There are a variety of ways to make gifts to Grand Rapids Community Foundation. Because each donor's philanthropic goals are different, we present here some of the possibilities for giving. We encourage you to contact a member of the Foundation's development staff if you have any questions about these giving options or other possibilities.

Cash

A gift of cash is the most popular way to give because of its simplicity. A cash gift of any size is welcome. You may give online by clicking the Donate Online link to the upper right. You may also send a check or credit card payment in the mail.

401 K and IRAs

Assets held in 401k and IRA accounts require special consideration in your financial and estate planning.

The law requires that you pay income tax on any withdrawals from the accounts, diminishing their value for you and your heirs. If you leave retirement assets to family members in your estate plan, an estate tax may be levied as well. This double taxation could leave as little as 36% of the asset for your heirs.

By donating retirement assets to Grand Rapids Community Foundation during your lifetime, you can remove them from your estate, preserve more of their value, and receive a federal deduction for the gift.

Roth IRAs are an option for all in 2010

Same-year charitable gift saves tax, starts your legacy

If you’ve been thinking about making a major gift, making a real difference in an area of community close to your heart, and establishing your charitable legacy, 2010 may be a prime time to do all of the above.

This timing makes sense for individuals who are taking advantage of tax legislation that now allows all taxpayers—even those who have taxable income of $100,000 and above—to invest in Roth IRAs and convert their traditional IRAs to Roth IRAs.

Roth IRA assets are investments of after-tax dollars, and after that, all earnings and withdrawals are tax-free. Prior to 2010, only people with taxable income of less than $100,000 were eligible for this special type of account and the tax-free income it promises in retirement.

The reasons for making a charitable gift in the same year you convert your traditional IRA to a Roth IRA are enhanced with the opportunity to increase tax deductions in an unusually high-income year.

Here’s why: when you transfer funds (all or part) from a traditional IRA account to a Roth IRA, the funds converted are considered taxable income. You owe income tax on a fairly large transaction. Since your income will be higher that year, you may find yourself in a higher tax bracket. And, if you are younger than age 59½, the funds you transfer should go in full to your new Roth IRA; tax payments should come from another source.

You can lower your tax bill by finding additional tax deductions (see chart below), including a charitable gift to the Community Foundation. By establishing or adding to a Donor Advised Fund, you can take the tax deduction in this high- income year and recommend grants to causes you care about most for years to come. A variety of fund options provide simple, powerful and highly personal approaches to giving.

 

Roth IRA Conversion

Conversion Plus a Charitable Gift

Regular Income

$200,000

$200,000

Roth IRA Conversion

$100,000

$100,000

Normal Deductions

($11,400)

($11,400)

Charitable Deduction

 

($100,000)

Exemptions

($7,300)

($7,300)

Taxable Income

$281,300

$181,300

Federal Taxes

$70,610

$39,008

Of course, whether this is the right financial, tax and giving strategy depends on your personal circumstances and goals. Hometown Community Foundation is always happy to meet with you and your professional advisor to discuss what is best for you and your estate. We can explain options for turning this gift into a meaningful legacy for you, your family and the community you care about.

Stocks, Bonds, Mutual Funds

Giving gifts of appreciated property in the form of stocks, bonds or mutual funds will provide greater tax benefits than a cash gift of equivalent value, especially if they have a low cost basis. You will receive a charitable deduction for the full market value of your property—even if you initially bought it for far less. You will also avoid capital gains tax—money you’d have to pay if you liquidated the property.

You may deduct the full fair market value of gifts of long-term capital gain property up to 30% of your adjusted gross income. Any amount in excess of the 30% ceiling can be carried forward for five years.

Key benefits to remember:

  • Charitable deduction for the fair market value, not the original investment
  • No capital gains tax
  • No minimum required
  • Multiple gifts can be combined to establish a fund
  • Substantial tax savings
  • Reduces the size of your estate

Closely Held Stock

If you own closely held stock in your business, you may choose to contribute it to Grand Rapids Community Foundation. Closely held stock is generally not sold to the general public. If you must liquidate it, giving it to a charitable organization will offer you and your company a number of advantages. First, you’ll receive a charitable deduction for the appraised fair market value. You’ll also avoid tax on the capital gain. And, at a later date, the company may redeem the stock, or the company Employee Stock Ownership Plan or another shareholder may buy the stock at its fair market value.

Key benefits to remember:

  • Take a charitable deduction for the appraised market value, not the cost basis (original investment)
  • Avoid capital gains tax
  • Buy back or redeem the stock
  • Reduce the size of your estate

Real Estate

A home... a cottage... business property... undeveloped land. If you have real estate assets that you would like to use for a charitable gift, Grand Rapids Community Foundation can help.

We can accept the gift outright, or show you how a charitable trust can be used to convert your asset into a gift that also produces an income.

Because each gift of real estate is unique, a Grand Rapids Community Foundation staff member would be happy to meet with you to discuss the logistics of making such a gift.

Key benefits to remember:

  • Charitable deduction based on the appraised fair market value, not the original investment
  • No capital gains tax
  • No minimum required
  • Substantial tax savings
  • Reduces the size of your estate

Life Insurance

Making a gift of life insurance is simple and cost-effective. To make a charitable gift from life insurance add the Grand Rapids Community Foundation as a primary, secondary or contingent beneficiary to your policy. A contingent beneficiary means the Community Foundation will receive what's left from the policy after taxes and other expenses are paid.

Donors can give the Community Foundation a paid-up policy which is eligible for a tax deduction equal to the cash value. A new policy may also be purchased specifically for charitable purposes. By naming the Foundation as the owner and beneficiary of the policy, the premiums paid on the policy are tax deductible.

Professional Advisors - If you are a professional advisor and would like to receive timely and authoritative information on charitable gift planning please stop by the Foundation's Planned Giving Design Center by clicking here.

For more information on ways to give please contact Marilyn Zack, Vice President of Development, at 616.454.1751 or email her at mzack@grfoundation.org.